Protect the future you’re building with income protection cover for your family if you cannot work due to illness, unemployment, or an accident.
What is Income Protection insurance?
Income protection policies protect you and your family against the loss of income because of unemployment, illness, or accidents. The benefits from income protection insurance are tax free and could cover you until you return to work or retire.
An income protection policy is an essential part of future-proofing your lifestyle. Right now, while your income is stable and you’re enjoying your job, you can plan for the future. If your family relies on your income, then you may need income protection insurance to protect them from problems caused by accident, sickness, and unemployment.
Unemployment Cover Protects Your Future and Family
Almost 41% of people in the United Kingdom don’t have more than a month’s expenses in savings somewhere.
If you are unable to work, could your family still afford to pay your rent or mortgage? Could they afford to pay the gas, electricity, broadband, and phone bills? If the answer is no, then you should really consider income protection.
Unemployment protection means your insurance policies will cover you with a lump sum or monthly payments if things ever went wrong and you could not work at your job. For families that rely on a single salary, this kind of income protection policy is vital for security.
Compare Income Protection Insurance Policies
An expert adviser will help you compare income protection quotes and find the best cover for your family.
Accident, Sickness, and Unemployment Cover
Income Protection Insurance policies will help cover any loss of income when you cannot work at your job for one of these reasons.
Income Protection Cover Gives You Peace of Mind
In the aftermath of an accident or job loss, the support and money you receive from your income protection cover will help maintain the stability of your family.
The Difference Between Income Protection and Critical Illness Cover
Critical illness is one of the main types of income protection insurance. However, it does not pay out for less serious claims of illness or injury. That’s where income protection insurance becomes valuable. Let’s have an example.
Imagine you’re a roofer with two young kids at home and a family that counts on your income. One day, there’s an accident and you break your leg. You’ll be unable to work for weeks.
Critical illness will not cover this accident. Income protection claims will provide for your family when your salary disappears because of a mishap.
Income protection insurance will pay money to you when things happen that threaten your lifestyle, but not necessarily your life.
Common Questions about Income Protection Insurance
No, not normally in the UK. You paid for the insurance out of your income, which has already been taxed. Therefore, the benefits are not generally taxable.
You can file a claim as soon as you know you’ll be off work for a qualifying reason. If you have a deferred period, you do not need to wait until this finishes to make a claim.
This is the period between the first day when you are unable to work and the day your insurance benefits begin. Generally, longer deferred periods mean lower premiums.
If you receive sick pay from your employer, then you should take full advantage of this to keep your premiums lower. Deferring your salary replacement payments until the end of any sick pay period will make your income protection insurance cost less.
The length of deferred period you choose is a big factor in the cost. Other key considerations would be your health, lifestyle, occupation, and how much you earn. Finally, how long you would like to be able to claim. You could want protection for 2 years from when you start to claim, 5 years, or even right up until retirement.
Most income protection policies cover up to 60% of your salary. Policies vary from insurer to insurer, so this is a key detail you will want t double-check.
Your occupation is a key factor. If your job carries a high level of risk, then your income protection insurance premiums might be higher.
You can get income protection insurance without a medical, but some insurers may ask for one. If your insurer asks for a medical, it’s not a rejection. You could still be eligible for cover after you’ve given a bit more info about your medical history.